A Portfolio Comprised of Which One of the Following Is

question 73

Multiple Choice

A portfolio comprised of which one of the following is most apt to be the minimum variance portfolio?

• A) 100 percent stocks
• B) 100 percent bonds
• C) 50/50 mix of stocks and bonds
• D) 30 percent stocks and 70 percent bonds
• E) 30 percent bonds and 70 percent stocks

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Definitions:

Equilibrium Output

The level of output where the aggregate supply equals aggregate demand, meaning there is no tendency for the economy to change size.

Short-Run Aggregate Supply

Shows the relationship between the price level and the quantity of goods and services that firms are willing and able to supply in the short term, holding some inputs fixed.

Long-Run Equilibrium

The price level and real GDP that occurs when (1) the actual price level equals the expected price level, (2) real GDP supplied equals potential output, and (3) real GDP supplied equals real GDP demanded.

Aggregate Demand Curve

Represents the total quantity of all goods and services that households, businesses, and government are willing to buy at each price level in an economy.